26th November 2008
Solomon Gold
Finalises Proposed Terms for
Agreement with
Newmont on Guadalcanal Projects
The Solomon Gold plc (Solomon Gold or the
Company ) is pleased to advise that the Company has signed a term
sheet outlining the principal terms of a proposed agreement with
Newmont Ventures Limited (Newmont) a wholly owned subsidiary of
Newmont Mining Corporation, (NYSE: NEM) in respect of Solomon Gold's
copper gold exploration projects on the island of Guadalcanal,
Solomon Islands.
Under the terms of the proposed agreement,
Newmont will be able to earn up to an 80% interest in five
exploration licences (Koloula PL 02/05, Central PL03/05, Mbetilonga
PL04/05, Sutakiki PL05/05, and Kuma PL08/05).
The term sheet signed by both Solomon Gold
and Newmont confirms that no binding agreement would be constituted
until the execution of a definitive agreement by both parties and the
completion of due diligence by Newmont within 60 days.
The
principle terms provide that Newmont may earn a 51% interest by
expending US $6 million within 3 years (Stage 1 earn-in ), and may
elect to expend a further US$6 million (total US$12 million) to earn
a further 19% to a total 70% over a further 2 year period (Stage 2
earn-in). Solomon Gold will act as manager for the first year of the
program and Newmont may elect to manage the program thereafter.
Newmont currently proposes to second at least one of its
geoscientists experienced in porphyry projects discovery and
assessment in the South Pacific, to the project.
Solomon
Gold may elect after Newmont has earned 70% within 5 years to accept
a Newmont funding option which provides for Newmont to earn a further
10% to total 80% by funding Solomon Gold to mining. Solomon Gold
would in that case be obligated to repay its 20% share of all of
Newmont's costs from the 70% earn point at the end of year 5, plus
interest.
If
either Solomon Gold's or Newmont's interest is reduced below 10%
interest in the project, then that party shall revert to a 0.5% net
smelter return royalty on production within the project.
Alternatively
in the event that Newmont does not elect to progress to Stage 2 of
the earn-in, the parties will contribute pro-rata to a minimum $1m
per annum budgets or dilute on a pro rata basis. Management of
the project will be subject to agreed fees.
Solomon
Gold continues to hold its prospecting licence application on Fauro
Island and Nickel exploration tenements on eastern Guadalcanal and
Ngella in the Floridas and Makira Island.
The
Solomon Gold board considers Newmont's interest in Guadalcanal Island
as a significant demonstration of support for the prospectivity of
Solomon Gold's projects on Guadalcanal Island. Newmont is one of the
worlds leading gold project development and operating companies, with
considerable experience in the south west Pacific and Indonesia.
About
Solomon Gold
Solomon Gold holds an extensive tenement position on the main Island
of Guadalcanal, Solomon Islands, for minerals exploration, focusing
on copper and gold rich porphyry systems and high-grade epithermal
gold mineralisation. The Company listed on AIM on 10 February 2006
after a �5m capital raising.
Solomon
Gold believes the area, located on the southwest Pacific Rim, to host
potential for the discovery of copper gold porphyry systems similar
to other large ore bodies in the region such as Ok Tedi, Grasberg and
Bougainville, which each contain mined and current resources in
excess of 40m oz of gold equivalent as gold and copper. The Company
is staffed by an active team of expatriate and Solomon Island
geologists and field hands, supported by integrated logistics support
services.
In
late 2007 the Company announced an intersection of 32m @ 9.45 g/t
gold from 108m in drill hole SK011 at Sutakiki in the centre of the
broadly mineralised intrusive system. In December 2007 Solomon
Gold raised a further �3.5m to continue working on the Guadalcanal
projects.
It is
the current intention of Solomon Gold to explore for porphyry copper
gold deposits with overprinted high-grade epithermal gold
mineralisation and ultimately bring one or more into production.
Solomon Gold has access to the required exploration, development and
financing skills to achieve this goal.
The
high-grade gold mineralisation encountered in the recent drilling at
Sutakiki is characteristic of high-grade gold deposits related to
mineralised transform structures in Papua New Guinea and the Indonesian
archipelago.
The
company recently completed a 2000 line km airborne electromagnetic
VTEM survey, the results of which are not yet available.
For
more information contact:
Kevin Nagle
Company Secretary
+61 7 3303 0660
info@solomongold.com